New tax deduction limits for company vehicles in Poland are being restructured based on CO2 emissions, significantly increasing costs for drivers of traditional combustion engines.
Carbon-Based Deductions
New regulations for settling passenger cars used in business activities will take effect in January 2026, with CO2 emissions serving as the key criterion for tax deduction limits. While intended to support the green transition and promote low-emission vehicles, these changes will increase operating costs for many businesses, particularly those using internal combustion engine vehicles.
The changes stem from the 2021 amendment to the Act on Electromobility and Alternative Fuels. Many entrepreneurs were reportedly unaware that this specific legislation would serve as the basis for changes to income tax regulations.
The New Three-Tier System
The system is expanding from two to three amortization tiers. The highest limit of 225,000 PLN is reserved for fully electric (BEV) and hydrogen vehicles. A middle tier of 150,000 PLN applies to vehicles emitting less than 50g of CO2 per kilometer, primarily plug-in hybrids. The lowest limit of 100,000 PLN applies to all other vehicles, including standard combustion engines and traditional hybrids.
For vehicles acquired via leasing or rental in 2025, a proportion must be applied starting January 2026 if the price exceeds the new limits. This proportion is calculated by dividing the applicable limit by the car’s net price plus half the VAT. It includes leasing installments and AC or GAP insurance, but excludes mandatory OC insurance and operational expenses like fuel or servicing.
Businesses that purchased combustion vehicles in 2025 and entered them into the fixed asset register will retain the previous, higher amortization limits.
Impact on Popular Models
Many popular models, such as the Toyota Corolla 1.8 Hybrid and Hyundai Tucson 1.6 HEV, now fall into the least favorable tax category. For a Hyundai Tucson 1.6 HEV valued at approximately 161,000 PLN, tax benefits for a business user could drop from nearly 35,000 PLN to less than 24,000 PLN over five years, assuming a 19% linear tax and mixed usage.
Market Realities and Expert Criticism
Tax advisor Piotr Juszczyk criticizes the rules for being disconnected from reality, noting that car prices have surged since 2021 while tax limits have remained stagnant or are effectively being lowered. Market data supports these concerns, showing that 94.2% of new passenger cars registered in Poland in the first half of 2025 emitted at least 50g of CO2 per kilometer.
In contrast, only 0.7% of the market—just over two thousand vehicles—qualified for the more favorable 150,000 PLN limit. While the rules aim to encourage ecological choices, the high cost of electric vehicles and developing charging infrastructure mean that financial calculation, rather than emissions alone, will dictate business decisions.
